ROLE OF FINANCIAL CONSTRAINTS IN THE RELATIONSHIP BETWEEN THE VOLATILITY OF ECONOMIC POLICY UNCERTAINTIES AND ACCOUNTING CONSERVATISM

Abstract

This study aimed to examine the role of financial constraints in the relationship between the volatility of economic policy uncertainties and accounting conservatism in companies listed on the Tehran Stock Exchange from 2014 to 2022. The volatility of economic policy uncertainties and accounting conservatism were regarded as independent and dependent variables, respectively. The study also used the library method to collect data. In the data section, sample corporate data were collected by examining financial statements, explanatory notes, and monthly stock exchange newsletters. The systematic elimination technique was used to select as many as 133 companies as the statistical sample. Descriptive and inferential statistics were used to describe and summarize the collected data. To analyze the data, initially, the Heteroscedasticity of Variance Pretests, the F-Limer Test, the Hausman Test, the Jarque-Bera Test, and then, the Multivariate Regression Test were used to confirm and reject the study hypotheses, using the EViews software. Findings showed that the volatility of economic policy uncertainties could positively and significantly affect accounting conservatism, with financial constraints moderating the relationship between the volatility of economic policy uncertainties and accounting conservatism. The results obtained in this study were found to correspond to the documents referred to in the study’s theoretical framework and the finance literature.